CANAL TOLLS INCREASED.

Nearly two years after Panama took control of its famous canal, it is launching new rules, starting with a higher toll for ships taking the 50-mile shortcut between the Atlantic and Pacific oceans, reports AP(Sept. 28, 2002). Ships crossing through the canal are now being charged an additional 8% toll, followed by a 4 percent hike in July 2003:

The new rates are part of the canal administration's plans to increase capacity and expand to accommodate modern ships, which are much larger than the ones steered through the locks a generation ago. Loaded ships now pay US$2.80 per ton for the first 10,000 tons and US$2.78 per ton for the second 10,000 tons. Unloaded ships pay less. It is the first rate increase since Panama took over administration of the canal on Dec. 31, 1999;

"The canal is our most important asset," said administrator Alberto Aleman Zubieta. Last year, income from crossings and other services provided by the canal came to US$800 million. Aleman Zubieta said that since its inauguration in August 1914, the canal "basically functioned as a form of subsidy for U.S. commerce," with low tolls that gave the U.S., the biggest user, a competitive edge. The canal was built and run by the U.S. until 1999;

"This non-profit policy was of absolutely no benefit to Panama," said Fernando Manfredo, former assistant canal administrator under the U.S. Panama began running the canal like a for-profit business, and with that came plans to remain competitive. The canal has not changed since its construction. A system of locks allows ships to be lifted to canal level at one end and then lowered on the other side. The system has served well for more than 80 years, but the locks must be expanded to handle bigger ships. Ships wider than 106 feet or longer than 965 feet cannot pass through the locks. The canal expansion is clear, but the financing is not. However, Aleman Zubieta is confident that the funds can be found. The estimated cost is between US$8 billion and US$10 billion.

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Copyright 2002